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Bitcoin (BTC-USD) gave up its post-CPI gains and tanked to near one-month lows in Thursday afternoon trading as liquidity concerns mounted. A slew of cryptocurrency-exposed stocks, in turn, took a hit.
The top digital token dropped 3.5% to $27.20K as of shortly before 1:00 p.m. ET, after topping $28.30K just a day before as U.S. CPI data signaled slowing inflation and thus more room for the Federal Reserve to pause its interest-rate hikes. BTC is still up 63% year-to-date, buoyed by stresses in the traditional banking sector and expectations that the Fed will soon end its tightening campaign.
Ethereum (ETH-USD) slid 3.5% to $1.80K, XRP (XRP-USD) descended 2.4%, cardano (ADA-USD) -4.5%, dogecoin (DOGE-USD) -4.2% and solana (SOL-USD) -4.8%.
The selloff comes as increased scrutiny of the crypto industry drove major market makers Jane Street Group and Jump Crypto to retreat from trading digital assets in the U.S., according to a Bloomberg report earlier this week that cited a person familiar with the matter.
The two firms are not pulling back from crypto trading entirely, though. Jane Street was said to scale back its global crypto expansion plans, while Jump Crypto — the crypto division of Jump Trading — is pulling back from U.S. markets but still plans to expand globally, two people familiar with the matter had told Bloomberg.
A decline in participation from institutional market makers could prompt more volatile price action across cryptos.
Crypto-related stocks under pressure include: Riot Platforms (NASDAQ:RIOT) -9.6%, Marathon Digital (NASDAQ:MARA) -10.8%, MicroStrategy (NASDAQ:MSTR) -8.3%, CleanSpark (NASDAQ:CLSK) -8.5%, Bit Digital (NASDAQ:BTBT) -7.5% and Hut 8 Mining (NASDAQ:HUT) -8.3%.
